What Elon Musk’s Lawsuit REALLY Means –And What To Expect Next
(ReliableNews.org) – On April 25, billionaire Elon Musk agreed to purchase Twitter for a startling $43.4 billion but just under 3 months later, on July 8, he decided to cancel the deal. In response, the social media platform filed a lawsuit with the Court of Chancery in the state of Delaware to force the Tesla CEO to go through with the merger agreement. Musk said that Twitter didn’t fill its “contractual obligations,” so now it’s up to the court to choose who is right.
The Lawsuit
The legal document spoke about how the contract between the two is binding. The platform accuses Musk of backing out because buying the company doesn’t serve “his personal interests” anymore. They allege he trashed Twitter online, bringing down the stock value before deciding the price he offered was no longer a match for the value of the social media site. The suit states his large following and presence give him power and influence over the company’s current success, and they want him to not only honor his obligation but stop talking disparagingly about the site altogether.
Although the $54.20 per share Musk offered heavily outweighs the current stock price of $36.75 at the close of the market on July 13, the billionaire chose the buyout price without prompting, and they believe he needs to follow through.
The court filing also points out that the buyer’s reasoning for backing out of the deal is flawed. The wealthy business owner claims there are too many bot accounts on Twitter while also stating part of the reason he wanted to purchase the platform was to get rid of those types of accounts. When the market took a dive, they said he started “demanding verification” of the number of fake accounts active on the site. In response, the social media giant complied by giving the potential buyer access to a plethora of documents to ease his concern about bot accounts. It claims Musk has no contractual recourse to simply change his mind about the purchase.
Musk Cancelation and Outcome
In a letter from Attorney Mike Ringler dated July 8, Musk outlined the reasons he’s seeking to terminate the contract with Twitter. He alleges the platform did not allow him to assess the number of bot accounts and withheld “critical information” about said users in the form of board notes and how the company calculated its fake account percentage. He also stated Twitter stood in the way when the buyer and his team tried to analyze the social media site’s data.
There are only two ways the court could rule on this matter: Either the judge will force Musk to buy Twitter at the offered price, or they will let him cancel the deal. The platform’s attorney, Sean Edgett, hopes to conclude the matter in September.
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